The home loan industry has overseen significant growth over the past couple of years. This rise is the result of increasing demand for houses, incentives offered by the government, as well as financial lenders offering housing loans at competitive interest rates. However, before applying for a home loan, it is very important to be aware of the home loan eligibility criteria set by lenders. There are many cases where lenders have rejected loan applications because they have not matched the eligibility criteria for getting housing loans.
In order to fast-track the loan processing and approval procedure, take a look at the basic housing loan eligibility criteria that applicants are required to meet:
- Home loans for salaried individuals
- Should be within the age bracket of 18 to 60 years.
- Should be an Indian citizen.
- If the applicant resides in cities such as Mumbai, Delhi, Pune, and Chennai, their minimum income should be Rs. 20,000/- a month. (for other cities, the minimum income is usually set at Rs. 15,000/- a month.)
- If the applicant is working at a partnership firm or a private limited company, they should have a graduation certificate. However, if the applicant works at a Public Limited company, MNC, government, or Public Sector Company, there is no such criterion.
- Home loans for self-employed individuals
- Should be within the age bracket of 18 to 65 years.
- Should be an Indian citizen.
- Should have a stable income record.
- Should have a business operating for 5 years.
Do note that the eligibility criteria can differ from lender to lender, so it is always best to check with the financial institution regarding this before you apply for home loan. Also, keep in mind that lenders prefer applicants who maintain a credit score (CIBIL score of 750 or more).
This process does not have to take much time since there is no need to wait for a lender to tell you about the loan eligibility. This is where a home loan eligibility calculator proves to be a handy online tool!
- Using a home loan eligibility calculator
Before applying for a loan, it is always best to already have a sound plan on repaying it. Making use of a home loan eligibility calculator will help plan your finances and also understand whether the loan plan is an affordable one.
First, a home loan eligibility calculator will need your date of birth or city of residence. Once this is done, fill up fields in the calculator regarding the loan repayment tenure, monthly income, any additional sources of income, and existing monthly instalments from any other loans. This is an effective way to find out the loan amount that you are eligible for.
Please make sure not to confuse the eligibility calculator with a home loan EMI calculator, which is meant to calculate the home loan’s monthly instalments. A home loan eligibility calculator will help you pick a lender that is offering a home loan with good terms.
